- FTSE 100 slides 14 points
- US indices to open higher
- European Commission’s Economic Sentiment Indicator for the UK climbed to 83.0 in September from 75.1 in August
As time ticks down to tonights potentially crucial US presidential debate, US investors appear to be prepared to hope for the best.
Spread betting quotes suggest the Dow Jones index will open a modest 26 points firmer at 27,610 while the S&P 500 is expected to start 6 points to the good at 3,357.
The tech-heavy NASDAQ Composite is looking a bit more hale and hearty, with a 277 point gain to 11,395 in prospect.
The show-down between two ageing gunslingers is not the only political show in town, of course, following yesterday’s proposal bythe Democratic Party of a US$2.4tn stimulus package for the US economy.
“Yesterday, we heard more positive tones from Democratic House Speaker Nancy Pelosi, who said that she has spoken with US Treasury Mnuchin on another relief package and that she expects talks to continue. With the Democrats lowering their demands, she argues that it is the White House and the Republicans’ turn to follow suit by accepting a larger stimulus package,” reported Danske bank.
“While an agreement still seems at least somewhat down the road (the White House and Pelosi are still around USD1,000bn apart), risk sentiment got a boost yesterday afternoon from Pelosi’s comments. As we argued in yesterday’s morning comment, if the two parties can agree on more fiscal stimulus, it may be the trigger for shifting the recent risk headwind to tailwind,” the Nordic investment bank said.
Also on the agenda today are speeches by Federal Reserve policy-makers, Messrs Williams, Harker and Quarles.
Palantir, the data analytics company, is set to float today and is expected to be valued at around US$20 billion.
“For the day ahead, I’ll be watching out for the Palantir IPO, Micron Technologies earnings and the first presidential debate between Donald Trump and Joe Biden,” revealed LCG’s Jasper Lawler.
“Really Palantir (ticker PLTR) will be a direct listing not a proper IPO. The listing is expected to value Peter Thiel’s company at over US$20 billion but as is often the case with tech companies when raising money – it is still unprofitable,” Lawler noted.
In Lonon, the FTSE 100 was down 17 points (0.3%) at 5,911 after the European Commission’s Economic Sentiment Indicator (ESI) for the UK climbed to 83.0 in September from 75.1 in August.
A value of 100 represents the average value of the index between 1990 and 2019.
“The big increase in the ESI in September is an encouraging sign that the recovery hasn’t ground to a complete halt, though the shortfall in demand relative to its pre-COVID level still seems to be bigger in the UK than in the rest of Europe. Indeed, the UK’s ESI still was substantially below the Eurozone’s, 90.2, in September,2 observed Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.
11.45am: Asia-focused banks give back some of yesterday’s losses
The Footsie remains in the doldrums, not least because some of yesterday’s big gainers – Asia-focused banks – have come back down to earth today.
The FTSE 100 was down 26 points (0.5%) at 5,901, with the retreat led by International Consolidated Airlines Group SA (LON:IAG), down 3.4% at 91.24p. The British Airways owner has taken up a semi-permanent residence in the Footsie’s cellar, as has another stock intrinsically tied up with air travel, Rolls-Royce Holdings PLC (LON:RR.), which is down 3.2% at 144.5p.
The top riser in London was Canadian Overseas Petroleum Ltd (LON:COPL), up 26% at 0.295p, after its board approved the granting of 341.6mln share options effective September 14, 2020.
The options can be exercised at a price of 0.35p – so a bit of a way to go yet and some market observers have suggested other reasons may be behind today’s rise.
10.15am: Market waits for presidential debate sponsored by Saga
London’s investors are exhibiting signs of apprehension ahead of tonight’s face-off between the two septuagenarian US presidential candidates.
The FTSE 100 was down 37 points (0.6%) at 5,891.
“It’s all going to kick off later tonight, as the first US presidential debate takes place in Cleveland. The fun starts at 9pm US Eastern time and will last one and a half hours,” said Neil Wilson of markets.com.
No indication from Neil or anyone else whether there will be a break in the debate for cocoa.
“Trump won in Ohio, a typical battleground rust belt state, by eight points last time around but it is leaning towards Biden in 2020, according to the polls but we know polls only tell a portion of the story – it’s in the battlegrounds where it counts,” Wilson said.
The shares were up 4.4% at 512p after the company said like-for-like sales were up 19.2% in the quarter.
“The group is one of the market leaders in a structurally growing discounter market, and should outperform in a recessionary environment,” suggested Amisha Chohan, an equity research analyst at Quilter Cheviot.
“The retailer is also winning market share and has attracted a new, middle class, customer base – who are beginning to shop with them regularly. We believe B&M will continue to outperform peers as consumers become much more money conscious,” the analyst added.
8.45am: Ferguson leads blue-chips, while cut-price Greggs continues to struggle
The FTSE 100 made a quiet start ahead of key data including the Bank of England‘s credit reading and monthly mortgage approvals.
Trade negotiations between the UK and EU are heading into a decisive phase, though nobody is talking about a quick resolution to the impasse over the internal markets bill.
The excitement after hours will come from the US where incumbent Donald Trump goes head to head with the early poll leader, Joe Biden, in the first of the 2020 campaign’s televised presidential election debates.
On the market, Ferguson (LON:FERG), a UK plumbing and heating specialist, was an early winner, rising 5.7% after better-than-expected full-year results.
“The actions taken at the height of the pandemic mirrored what was being done in many global boardrooms,” said Richard Hunter, head of markets at Interactive Investor.
“The interim dividend and share buyback programme were suspended, as was the M&A programme and there was tight control on capital expenditure.
“This had the effect of freeing up additional capital when it was most needed, and having come out of the other side the company is now reaping the benefit of those temporary actions.”
On the FTSE 250, Greggs (LON:GRG) delivered what one commentator referred to as a ‘flaky’ performance after the bakery chain said trading would remain below normal levels for the foreseeable future. The shares shed 4%.
A former tiddler that is now worth north of half a billion pounds, Novacyt (LON:NCYT) spiked a further 20% in early deals after it was announced the healthcare company had launched its COVID-19 antibody test.
Proactive news headlines
Westminster Group PLC (LON:WSG) said its technology division has been awarded a contract to replace and maintain security screening equipment at the Palace of Westminster, also known as the Houses of Parliament.
IXICO PLC (LON:IXI), the brain imaging analytics specialist, has received a GBP2mln extension to a contract from a ‘top-20’ pharma client to provide additional imaging services for a pivotal Huntington’s disease (HD) study.
CentralNic Group PLC (LON:CNIC) said the conditions of its acquisition of Zeropark and Voluum, collectively known as Codewise, have been satisfied or waived, and as such, the deal is now unconditional and shall become effective at the end of October.
Ncondezi Energy Limited (LON:NCCL) said it has submitted a historical cost audit report to China Machinery Engineering Corporation (CMEC) for its Ncondezi integrated 300 megawatt (MW) power project in Tete, Mozambique. In a separate announcement covering its results for the six months ended June 30, Ncondezi reported a loss for the period of US$1.21mln, narrowed from US$1.26mln in the previous year, while it ended the first half with cash of US$592,000.
Shares in Iofina PLC (LON:IOF) surged on the back of interims that revealed record revenue and underlying earnings (EBITDA) for the iodine extractor. Revenue in the six months to the end of June rose 8% to US$15.74mln from US$14.53mln in the corresponding period of 2019 while EBITDA jumped 50% to US$2.95mln from US$1.97mln.
Zanaga Iron Ore Company Ltd (LON:ZIOC) said the recent rise in the price of iron ore has made its project in the Republic of Congo even more attractive. Work is running within the 2020 budget forecast, it added, while cash reserves at 28 September were US$0.5mln.
Chariot Oil & Gas Limited (LON:CHAR) acting chief executive Adonis Pouroulis highlighted an exciting phase in its evolution, as the company released its interim results.
Powerhouse Energy Group PLC (LON:PHE) has highlighted a “transformative” six months in the first half of its current years as it achieved first commercial revenues from engineering services on its Protos project.
Ironridge Resources returned a loss before tax of A$6.4mln during the year to 30 June 2020. At the year end, the company had A$7.3mln in the bank, enough to carry it through significant work programmes on its gold and lithium assets in West Africa, especially since it’s also running a drill-for-equity programme with GeoDrill.
AfriTin Mining Ltd (LON:ATM) generated revenue of just over GBP1mln during the six months to June 2020, as operations at its Uis mine in Namibia continued to gain momentum after the recent start-up. The loss before tax was also just over GBP1mln.
Crop protection, animal health specialist Eden Research PLC (LON:EDEN) is confident it can capitalise on the market opportunity for biopesticides following its fundraising in March, while the first half of 2020 saw the company make progress with its new insecticide products and pursue other key opportunities in its pipeline.
6.37 am: Quiet start predicted
The FTSE 100 is poised for a quiet start on Tuesday ahead of another potentially important day for Brexit talks.
London’s blue-chip benchmark has been tipped to gain two points after the opening bell, a day after adding just over 85 points or 1.5% to finish at almost 5,928.
Overnight, Wall Street got off to an early lead and kicked it about until the final whistle.
The Dow Jones closed up 410 points or 1.5% higher at 27,584.06, while the S&P 500 climbed 1.6% and the Nasdaq Composite fizzed up 1.9%.
Later, thoughts stateside will turn towards the late evening’s presidential debate between the incumbent in the White House and his challenger in the blue corner, Joe Biden.
This could result in a potential for the market to see “four seasons in one day, ending in winter,” said market analyst Jeffrey Halley at Oanda, expecting the revelations about the state of President Trump’s financial affairs to “bring an extra edge” and so we should “expect fireworks”.
The positivity in global markets again coincided with the coming end of the month and the end of the quarter, meaning a lot of institutional investment fund managers are carrying out portfolio rebalancing.
“I would suggest that those flows, rather than a sudden ‘the world is saved’ epiphany are the genesis of the overnight equity rally,” said Halley.
“That appears to have dragged in the FOMO [fear of missing out] buy-the-dip mob on a day when nothing materially changed in the world to justify the moves.
“US airline stocks, in particular, and banks, had an exceptional day. A session where the buy everything mob think airlines look cheap is as good a warning sign for the longevity of the overnight rally as I’ve ever seen. At least big tech is cashflow positive, even if they are not cheap.”
Back in the UK, there may be major Brexit headlines later as the final scheduled round of negotiations take place to try and set up a free trade deal by the October 15 deadline set by Downing Street to prepare a full treaty by the end of the year.
Around the market
Pound up 0.15% to US$1.2853
Gold down 0.1% to US$1,878.11
Brent Crude Oil down 0.5% to US$42.23
6.45 am: Early Markets: Asia / Australia
Shares in Asia-Pacific were mixed today with Hong Kong’s Hang Seng index dipping 0.49% while Mainland China’s Shanghai Composite was up 0.32%
In South Korea, the Kospi rose 0.96% and in Japan, the Nikkei 225 advanced 0.31%.
Australia’s S&P/ASX 200 was down 0.13% even as the country’s consumer confidence rating rose by 1.2% to a 13-week high of 93.5.
Proactive Australia news:
Galileo Mining Ltd (ASX:GAL) has received broad intersections in drilling at the Lantern prospect within Western Australia’s Fraser Range Nickel Belt that expand the Lantern South nickel-copper footprint.
Red River Resources Limited (ASX:RVR) has increased the mineral resource for Hillgrove Gold Project in northern NSW to 692,000 ounces of gold and 75,000 tonnes of antimony after updating the Syndicate Lode resource estimate.
Alto Metals Ltd (ASX:AME) has delivered more high-grade gold results in final assays from a recently completed 5,562-metre reverse circulation (RC) drill program at the new Orion Lode discovery of Sandstone Gold Project in WA, including up to 29 metres at 3.5 g/t from 49 metres.
Mako Gold Ltd (ASX:MKG) will begin exploration in around a month after the Ministry of Mines in Cote d’Ivoire granted a permit for the Korhogo Nord project, which is within 30 kilometres of Barrick Gold Corp’s (NYSE:GOLD) 4.9-million-ounce Tongon Gold Mine.
Paradigm Biopharmaceuticals Ltd (ASX:PAR) has extended its exclusive licence and supply agreement with bene pharmaChem, which remains the only FDA approved manufacturer and supplier of Pentosan Polysulphate Sodium (PPS).
Meteoric Resources Ltd (ASX:MEI) is well-positioned to benefit from a strong gold market while actively exploring its highly prospective Brazilian and Western Australian projects.
Andromeda Metals Ltd (ASX:ADN) has revealed a maiden resource of 51.5 million tonnes of Bright White kaolinised granite for the Hammerhead Deposit, 5 kilometres to the north of the Great White Deposit on the Eyre Peninsula of South Australia.